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Redfin Fremont Home Buying Class

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Redfin’s Home Buying Class Redfin’s Southern East Bay August 21, 2014 - Fremont, CA Host: Jess Almeida & Rahul Puri @Redfin http://www.facebook.com/Redfin
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Page 1: Redfin Fremont Home Buying Class

Redfin’s Home Buying ClassRedfin’s Southern East Bay August 21, 2014 - Fremont, CA

Host: Jess Almeida & Rahul Puri

@Redfinhttp://www.facebook.com/Redfin

Page 2: Redfin Fremont Home Buying Class

Meet Redfin’s Southern East Bay Team

Page 3: Redfin Fremont Home Buying Class

Agenda● Overview of the process● Are you ready to buy?● Understanding the market● Mortgages● Short sales & foreclosures● Break!● Choosing an agent● Never miss a home● Touring● Making an offer● Acceptance to closing

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A Little Bit About Redfin

Redfin is a real estate brokerage on a mission to make buying and selling a home better for you.

● Accountability: we’re on your side, giving you honest advice

● Technology: sellers get more traffic; buyers tour homes first

● Value: a full-service brokerage that saves you thousands

No obligation

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Are You Ready to Buy?

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Are You Ready to Buy?● Do you have a family and need room to grow?● Do you expect to stay put for 5 or more years?● Have you saved up for a down payment? 3.5% to 20+

%● Have you saved up for closing costs? Typically 0-2%● Can you rent for less?

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Understanding the Market

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Current Inventory

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Current Market: Rising Prices

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Fremont Overview

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Where Are Rates Headed?

Type of Loan August 15, 2014 August 5, 2014

30-Year Fixed 4.14% 4.12%15-Year Fixed 3.27% 3.22%

5/1 ARM 3.00% 3.01%

1-Year ARM 2.35% 2.38%

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Short Sales and Bank Owned

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What is a Short Sale?The owner owes more on the mortgage than the home is worth● Usually pre-foreclosure, but not always● Listed for less than what’s owed to the bank● Requires 1 - 2 banks’ approval (usually 2)● May have other liens (taxes, utilities, HOA)

We Can Help With a Short Sale!● See short sales with a Redfin Agent● If you want to buy, work with a Redfin Agent or a short sale

partner agent ● Redfin partner agents work for other brokerages but share

Redfin’s commitment to customer service● Get a 15% commission refund

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What is a Bank-Owned Property? ● A foreclosed home owned by a bank or lender● Standard sale but:

► Verbal negotiations► Long response times► Repairs unlikely► Legal addenda may require an attorney► Limited or no disclosures► Banks demand use of their own contracts► Bank can back out any time until they’ve signed► Earnest money deposit usually held by listing

agent

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Selling Your Home with Redfin

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● We’re on your side► Agents paid on your satisfaction

● Double your exposure ► Premium placement on Redfin► Zillow, Trulia, Craigslist and Realtor

● 1.5% listing fee► Professional photos► Beautiful flyers

We’ve helped over 50 people sell their homes in the last six months.

Better Service, Lower Fees

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Redfin Agent Reviews

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Mortgages

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Start Shopping for LendersCompile a list of 3-4 local lenders

Good sources include:● Redfin's partner lenders ● Referrals from friends, family & co-workers● Online review sites, such as Yelp● Local chains and offices

*Know your lender

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Local Recommended Lenders

In no way does Redfin benefit

financially from recommending lenders – we

just think they’re great

lenders!

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Review Your Financial Situation● Pull credit report, look for errors● Establish comfort level for monthly payment● Figure out how much monthly income goes towards

debt: 28 – 33% healthy

● Pay down credit balances to 1/3rd● Don’t open any new lines of credit● Don’t buy any big ticket items● Source of money● Current employment status

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Get Pre-Approved EarlyA pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you● Establishes what you can afford & makes offer process go

faster● Redfin asks that you get pre-approved before your third

tour● Good for 90 days, depending on lender

Info needed:

●W-2, two pay-stubs, tax returns, bank statements

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Getting Pre-ApprovedIncomeo Salary—Past 30 dayso Hourly—Consistency and historyo Self-employed—Two year average

Assetso Down Paymento Closing Costso Cash Reserves

Credito 640 for FHAo 680 for Conventionalo 720 for Rate

Improvement

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Pulling Credit: Is It Harmful?● Your credit report must be reviewed by a lender

before you can obtain a pre-approval● If you know your score, a lender should be able to

give you ballpark pricing for their loan products● Better to know sooner rather than later about credit

problems● Maintaining a pre-approval

has a negligible impact onyour credit score

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15-Minute Break

15 mins 7.5 mins End

Let’s Get Started!

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Choosing the Right Agent

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What to Ask Any Agent● Is this your full-time job?● Where were your last five deals?● Who else will be working with me?● When am I committed to working with you?● Has a client ever filed a compliant?● How are you paid?● Can I see some reviews of your work?

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Redfin’s Partner ProgramPartner agents are employed by other brokerages, and have teamed up with us to provide Redfin-certified service

We’ll refer you to a Partner Agent when:► A home is below Redfin’s minimum price► A home is outside of our service area► If it’s in your financial advantage to work with a

partner► We’re experiencing unusually high customer

demand

We survey all partner agent clients► All surveys are published on their Redfin page► 97% of customers would recommend Redfin

Partners

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Never Miss A Home

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Real Estate Sites: What to Look For● Has all the homes for

sale● Updated every 15

minutes● Real-time sales data● Insights from agents● Lots of data● Mobile apps

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Never Miss a Home

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Seeing Homes in Person

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Slide 33 of 55

How Touring with Redfin Works● Led by agent or

associate agent● Up to six homes per

tour in two hour blocks● Go on as many tours

as you need●No obligation, no

pressure

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Making the Most of Your Tour1. Bring a camera, notebook & tape

measure2. See how much sunlight the place gets3. Check the bathrooms for rot & mold4. Look for wavy or discolored wood

siding5. Make sure water spouts drain away

from house6. Take stock of storage space7. Turn off any music playing in house8. Check for hardwood floors

9. Peek into the attic10. Bring a marble or two11. When sharing a wall, make sure it’s

thick12. Ignore the appliances and carpets13. Check the closets14. Get the disclosure packet15. Compare the property’s tax records to

the listing details

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Making an Offer

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Crafting Your Offer● Evaluate – your agent will provide you with

information about market conditions and recent sales in the area

● Consider the situation – the seller’s preferences, days on the market, and other interest will influence the process.

● Decide on price & strategy with your agent● Common contingencies & terms:

► Earnest Money► Inspection► Financing► Appraisal► Title Review

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Tips for Winning a Bidding War1. Just win, baby! Simply have the best offer.

► Cash is King► Escalate your price? ► Tighten your timelines► Remove some contingencies?

2. Get pre-approved with a local lender3. What’s important to the seller?4. Write a letter & appeal to the seller

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Acceptance to Closing

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Steps After Mutual Acceptance

● Earnest money deposit – usually 1-3%+● Inspection – approximately $500● Other inspections – sewer scope, septic, etc.● Loan application – 5 days or less● Title review● Appraisal● Loan approval● Document signing● Walk through● Closing● Receive your keys!

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Home InspectionWe recommend that you have a home inspection● Cost runs $350 to $1200 depending upon the

home’s size● Your agent will accompany you● Your time to evaluate the property

Let’s talk about:● What an inspection contingency covers and doesn’t

cover● Types of inspections

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What are Contingencies?This means the seller has accepted an offer on the property, but success may still depend on passing a home inspection or getting financing.

Other types:● Appraisal – Performed in conjunction with financing● Financing● Termite● Other

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What is Escrow?

Escrow is a third party intermediary that represents neither the buyer nor the seller.

What do they do?• Hold the earnest money• Arrange for payoff of any liens (seller’s mortgage,

utilities, etc.)• Coordinate the signing appointments for all parties• Receive and disburse funds for closing• Arrange to notify county offices to change ownership

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Title Companies● Prepares the final documents, including the HUD-1● Conducts the closing● Examines and clears the title to the property● Records the deed, mortgage and any other

recordable instruments● Issues title insurance to the lender and the buyer

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Signing and Closing

A few days before closing you will sign your closing documents and have a walk through.On closing day, you’ll probably get your keys at about

5pm.

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So What Now? ● Make sure it’s the right time for you● Start browsing online● Check out our Home Buying Guide● Find the right agent● Look for a local lender and get pre-approved● Start seeing homes in person● Make an offer & close the deal

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Thanks for Coming!Questions? Get in touch

Jess Almeida [email protected]   Rahul Puri [email protected]

Check out our upcoming classes:http://www.redfin.com/events

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All Done!